Article: Adjustable Rate Mortgages ? Determining Rates

Adjustable Rate Mortgages ? Determining Rates

Adjustable rate mortgages are to home buyers as carrots are to bunnies ? very tempting. The secret to figuring out if an adjustable rate mortgage is a good deal is the rate index used.



Indexes ? Setting Rates



Lenders really want your business and are willing to create enticing loan products to get it. Occasionally, lenders will offer adjustable rate mortgages that offer a lot of carrot on the front end, but none on the back end. These loans are typically offered to you with an insanely low initial interest rate, which has you looking at mansions and other structures completely out of your realistic price range. The problem with these loans is the rate rises dramatically after six months or a year when the rate becomes pegged to an index.



Indexes...
 

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Adjustable Rate Mortgages ? Determining Rates

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